At a press conference on 7 February 2008, the Union of Free Trade Unions of Slovenia (ZSSS) informed the public that numerous companies had proposed a special agreement to trade unions: in exchange for an employee pay increase, unions would have to waive the right to strike for pay-related issues in the future. ZSSS is planning penal proceedings against the employers concerned, and has also informed relevant international organisations on the matter.
Agreement on pay adjustment
After lengthy negotiations, it seemed that the social partners in the private sector had reached a compromise when on 25 January 2008 they concluded a tentative ‘Agreement on extraordinary pay adjustment in 2007 due to unexpectedly high inflation in 2007’ (SI0712049I) to compensate for the 5.6% inflation rate in 2007. The agreement also contained a provision according to which a collective agreement should be concluded that would put the pay adjustment into effect.
As a result, the trade unions cancelled the general strike that was planned for 6 February 2008. However, when legal experts from both sides began to draft a collective agreement on the basis of the tentative pay deal, disagreements erupted anew because each party understood the pay proposal in a different way. The Union of Free Trade Unions of Slovenia (Zveza svobodnih sindikatov Slovenije, ZSSS) (SI0210102F) declared that the employers had tried to manipulate the deal after it was finalised and, as a result, the collective agreement based on the pay accord was not concluded.
Nevertheless, as will be outlined in more detail below, the employers tried to enforce their interpretation of the pay adjustment agreement in two ways:
- some employers proposed special company agreements to company trade unions;
- the Slovenian Employers’ Association (Zdruzenje delodajalcev Slovenije, ZDS) brought a legal action against all trade unions that had concluded the pay adjustment agreement.
Most contentious issue
The tentative agreement on the extraordinary pay adjustment determined that, by January 2008, the employers must raise the basic pay by 4.7%. It is worth noting that many companies increased pay by 2% or more in August 2007. These pay increments in 2007 became crucial, as the interpretation of this provision later became the most contentious issue. Thus, the companies which in 2007 had already raised pay by 4.7% or more were not obliged to further increase pay levels in January 2008. Meanwhile, those companies which in 2007 had raised the pay by less than 4.7% were expected to increase pay levels by the difference between the actual rise implemented and the 4.7% threshold.
The main disagreement between the trade unions and the employers was whether the basic pay rises or overall pay rises in 2007 should be taken into account when determining by how much the individual companies should increase pay for January 2008.
Trade union interpretation of pay agreement
The trade unions interpreted the agreement on pay adjustment as stipulating that the basic pay increases in 2007 should be taken into account when determining by how much an individual company should raise pay for January 2008. To consider basic pay rises meant that employers had raised the pay by a lower degree in 2007 and consequently meant higher pay increases for workers in January 2008.
Extra payments for productivity, overtime, shift work and night work, for example, would also increase because Article 127 of the Law on Labour Relations (SI0706019I, SI0206101N) states that the basis for the calculation of extra payments is a worker’s basic pay. In addition, a worker could get a ‘13th month’ wage payment (SI0412301N, SI0612039I).
Employer interpretation
However, the employers interpreted the pay adjustment agreement as stipulating that the overall pay increases in 2007 should be taken into account, including basic pay, extra payments and the 13th month wage. To consider overall pay increases meant that employers had raised the pay by a higher degree in 2007 and consequently meant much lower pay rises for workers in January 2008.
Request to give up right to strike
At a ZSSS press conference held on 7 February 2008, the President of ZSSS, Dušan Semolič, announced that, in several tens of companies, the employers had tried to enforce a kind of company agreement on pay adjustment but not a company collective agreement, which would be enforceable. In these new agreements, a very low pay adjustment – rejected by the trade unions – was being offered to workers. In exchange for the pay increase, company trade unions would have to agree to give up their constitutional right to strike.
ZSSS plans to launch penal proceedings against the employers that have already proposed or will propose to company trade unions to conclude such an agreement. However, ZSSS does not want to reveal the names of these companies in order to protect the company trade union officials from the management.
The sectoral trade union officials have confirmed that employers in their economic sectors have been inviting company trade unions to conclude such agreements. The President of the Metal and Electro Industry Trade Union of Slovenia (Sindikat kovinske in elektro industrije Slovenije, SKEI), Lidija Jerkič, stated that she had received several proposals for such agreements and each of them contained the provision that the trade union should give up the right to present or future strikes of any kind concerning the pay rise either in the whole private sector or in the sectoral collective agreement. As these provisions were identical in different agreements, it is possible that they were the result of concerted action from the employer side.
Mrs Jerkič argued that this is blackmail, because the company trade union officials who refused to conclude such agreements were informed by the management that there would be no pay increase. These trade union officials could come under great pressure from workers if the management informed the workers that there would be no pay rise because the trade union officials did not sign the agreement. Mrs Jerkič added that the employers also aim to move the negotiations from the sectoral level to the level of individual companies.
ZSSS informs international institutions
ZSSS has informed numerous relevant international institutions, such as the International Labour Organization (ILO), the European Trade Union Confederation (ETUC) and others, about the situation.
In a letter (195Kb PDF) to these institutions, Mr Semolič wrote that employer organisations were continuing in their attempts to manipulate the pay deal within companies. They were doing this at a time when ZSSS was preparing a general strike in the private sector. In this way, employers were neglecting the rule of law and violating numerous national and international legal documents. The companies were thereby eroding the trust in social dialogue even further.
Employer reaction
The Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS) and ZDS (SI0711019I, SI0606019I, SI0211102F) explained that on 1 February 2008 they had sent their members a recommendation on the execution of the tentative pay agreement, concluded on 25 January 2008. The recommendation advised that the trade unions were refusing to finalise a collective agreement based on this provisional pay deal. Therefore, GZS and ZDS proposed to their member companies that in their monthly pay disbursement for January 2008 they should take into account their interpretation of the pay adjustment agreement.
GZS and ZDS emphasised that they had not, either by way of recommendation or any other way, asked individual employers to demand from trade unions to give up their right to strike of any kind in exchange for a pay increase. Moreover, they condemned such actions.
However, GZS and ZDS underlined that, for the employer organisations, the tentative pay agreement concluded on 25 January 2008 was a legal document with a moral and actual obligation. They did not want to avoid this obligation, even though the trade unions refused to reach a collective agreement based on this pay deal.
On 19 February 2008, ZDS brought a legal action against all trade unions that had concluded the tentative pay adjustment deal, demanding that they should reach a collective agreement which would put the pay adjustment into effect. Mr Semolič reacted to the ZDS demand by contending that the conclusion of collective agreements is a matter of free choice and that nobody can force it.
Violating international labour standards
On 19 February 2008, ZSSS announced a general strike (SI0712049I, SI0403103F, SI0211101F) in the private sector, which was due to be held on 12 March 2008. The union pointed out that, by forcing the trade unions to give up the right to strike, employers were violating the:
- European Social Charter, which states in Paragraph 4 of Article 6 on the right to bargain collectively that with a view to ensuring the effective exercise of this right, the parties undertake ‘the right of workers and employers to collective action in cases of conflicts of interest, including the right to strike’;
- ILO Convention No. 98 on the right to organise and collective bargaining, which stipulates in Article 4 that ‘measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers’ organisations and workers’ organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements’;
- International Covenant on Economic, Social and Cultural Rights, which declares in Article 8 that the ‘states parties to the present Covenant undertake to ensure (…) the right to strike, provided that it is exercised in conformity with the laws of the particular country’;
- Constitution of the Republic of Slovenia, which sets out in Article 76 that the ‘freedom to establish, operate and join trade unions shall be guaranteed’, and in Article 77 that ‘employees have the right to strike’;
- Penal Code of the Republic of Slovenia (427Kb PDF), which specifies in Paragraph 2 of Article 207 that ‘whoever breaches regulations and by-laws by preventing employees or hindering them from exercising free association and executing union activities, or obstructs the implementation of union rights, shall be punished by a fine or sentenced to imprisonment for not more than one year’.
Štefan Skledar, Institute of Macroeconomic Analysis and Development